Top US stocks to watch: Alphabet, Stellantis and Levi Strauss

Alphabet is being sued again, Stellantis hints it has performed better than expected, Levi Strauss to report later, Tesla’s latest sales figures out of China come out, Motorola could be under investigation in the UK, and Chinese firm LinkDoc is reported to have shelved its US IPO plans.

USA (1)

Alphabet

Pressure built on Alphabet yesterday as 37 US states and district attorneys sued Google and alleged it maintained its monopoly for its app store on Android phones using illegal tactics.

The states are claiming Google has been able to make ‘enormous profit margins’ from the Play Store, which acts as a portal for 90% of all apps downloaded on Android phones, using tactics such as buying-off competitors and using restrictive contracts. One claim suggests Alphabet was willing to pay Samsung not to compete in the market.

Alphabet claims the suit is about a handful of major app developers wanting preferential treatment rather than trying to aide small businesses and consumers. This builds on a number of court cases facing Alphabet in the US that threatens to disrupt its businesses across advertising, search and apps.

Stellantis

Carmaker Stellantis raised its expectations today after making a better start to 2021 than anticipated as improvements in prices and product mix helped boost margins.

The company said it expects a ‘very strong margin performance’ in the first half of 2021 and that it now expects to beat its 5.5% to 7.5% adjusted operating income margin over the full-year. That comes despite the shortage in semiconductors hitting the automotive industry hard in recent months. Stellantis reiterated, however, that industrial cashflows will continue to suffer from lower than expected production.

The news came ahead of its planned ‘EV Day 2021’ today, where it will unveil significant investments into electrification and connected software.

Levi Strauss

Levi Strauss, famous for its denim jeans, is due to release second-quarter results today, with analysts expecting a jump in revenue and for an improvement in earnings.

Analysts are expecting quarterly revenue to jump to $1.21 billion from just $497.5 million the year before and for the company to report diluted EPS of $0.10 compared to a $0.91 loss. Importantly, the results will be flattered as it comes up against weak comparatives from last year when the pandemic erupted and lockdowns were first introduced, causing sales to plunge and pushing it into the red.

Focus will be on the overall outlook, whether there is more clarity in Europe, and how it has performed online now that stores are open again. Notably, brokers are extremely bullish on the stock currently have an average Buy rating with a target price of $31.25.

Tesla

Tesla sold 33,155 electric cars made in China in June, the vast majority of which were sold domestically, according to data from the China Passenger Car Association.

The company sold 28,138 cars in China and exported 5,017 overseas. That represents a slight fall from the 33,463 cars Chinese-made cars sold in May. Notably, Tesla launched Model Y cars in China this week and lowered its starting price for the vehicle, which could boost demand going forward.

China accounts for about one-third of Tesla’s sales and although it produced more than many domestic rivals it is still lagging behind the likes of BYD, which sold over 40,500 electric and hybrid vehicles in the period.

Amgen

Tezepelumab, an asthma treatment developed by Amgen and AstraZeneca, has been given priority review by officials to pave the way for a potential speedy approval of the experimental treatment.

The fastrack comes following the latest data from a phase three trial that showed it offered superiority across every primary and key secondary endpoint compared to placebo.

‘Severe asthma is a challenging, complex disease for physicians and millions of patients and has a high unmet medical need,’ said David Reese, executive vice president of R&D at Amgen.

Motorola

The UK’s Competition & Markets Authority is considering launching an investigation into Motorola’s Airwave network used by emergency services.

The regulator is concerned that Motorola owns the critical network but it also supplying products and services to it. The CMA said it could consider asking Motorola to sell the network to alleviate its concerns.

‘Initial review of the evidence available indicates that the supply of the Airwave network in Great Britain is not working well, resulting in significant detriment to customers and the taxpayer,’ the CMA said.

LinkDoc

Chinese firm LinkDoc Technology Group, which deals in medical data, has postponed its plans to launch an IPO in the US after China signalled it was cracking down on firms with overseas listings, according to Reuters.

It comes after the Chinese cybersecurity regulator launched an investigation into a number of companies, including many that have recently listed in the US including ride-hailing firm Didi and Full Truck Alliance. Didi has been particularly hard-hit by the review and seen its share price tank below its listing price, which is likely to encourage other Chinese firms to shelve their plans until there is more clarity.

Noom

Weight-loss app Noom is reported to be preparing to launch an IPO, according to reports from Reuters, as the company looks to capitalise on a surge in demand during the pandemic.

Noom is thought to be hoping to more than double its $3.7 billion valuation achieved during its last funding round in May, the report claimed, citing unnamed sources. The listing is not expected to happen until next year at the earliest.

Noom uses behavioural psychology and artificial intelligence to deliver a paid mobile app programme that help people improve their health and lose weight.

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